SEC Ends Gemini Lawsuit Following $40M Restitution Plan
The U.S. Securities and Exchange Commission (SEC) has formally moved to dismiss its civil lawsuit against Gemini Trust Company, ending a significant legal battle over the exchange's Earn lending program. According to court filings on Friday in the Southern District of New York, the parties submitted a joint stipulation to dismiss the action "with prejudice," which prevents the agency from refiling the same claims. The original lawsuit, filed in January 2023, accused Gemini and its partner, Genesis Global Capital, of offering unregistered securities.
The dismissal was driven by a settlement framework designed to fully compensate Earn users. The SEC stated its satisfaction was based on the 100% in-kind recovery of investor assets through the Genesis bankruptcy proceedings. This recovery is supported by Gemini's commitment to contribute up to $40 million. Additionally, Genesis had previously settled with the SEC and agreed to pay a $21 million fine.
Dismissal Signals Shifting US Crypto Policy Since January 2025
This development is the latest in a series of withdrawn or settled enforcement actions against crypto firms since a new U.S. administration took office in January 2025, signaling a significant pivot in regulatory strategy. The SEC has also recently dropped high-profile cases against major industry players including Binance, Kraken, and Uniswap. This trend suggests a move away from the aggressive litigation that characterized the previous administration's approach to digital assets.
For investors, the dismissal reduces the regulatory overhang that has suppressed valuations and hindered operations for many U.S.-based crypto companies. The resolution of the Gemini case, which began during a peak regulatory crackdown, provides a clearer legal landscape. This apparent shift toward deregulation could foster renewed confidence and investment within the American crypto sector.
